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YoY shift: Bearish
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -1.00pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-2.06pp
Big -
Net-tone change vs last year's 10-K.
MD&A
+0.06pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+22
loss+7
harm+7
disrupt+6
failures+5
Positive rising
profitability+3
innovation+2
benefit+1
achieve+1
attractive+1
Risk Factors (Item 1A)
4,731 words
Item 1A. Risk Factors
The risks described below are not the only risks facing us. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. See also "Information Regarding Forward-Looking Statements" for certain warnings regarding forward-looking information contained in this document.
Economic and Industry risks
We depend on certain end-markets, and downturns or regulatory changes in those markets could adversely affect our sales, pricing and margins
We depend on certain end-markets, including automotive, alternative fuels, self-contained breathing apparatus ("SCBA"), aerospace, defense, healthcare and oil. Demand in these end-markets is influenced by macroeconomic conditions, customer inventory cycles, availability of credit, energy costs, government procurement cycles and regulatory change including the trade policy and tariff environment. If any of these end-markets experience a downturn, prolonged , or regulatory developments, our sales volumes, pricing and profit margins could be materially and affected. Dependence of either of our segments on certain end-markets may be more pronounced, and it is possible that multiple end-markets could at the same time.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairments+1
volatility+1
unfavorable+1
ceased+1
opposed+1
Positive rising
excellence+2
positively+2
greater+1
gains+1
improving+1
MD&A (Item 7)
7,677 words
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Information regarding forward-looking statements
This Annual Report on Form 10-K contains certain statements, statistics and projections that are, or may be, forward-looking. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. The accuracy and completeness of all such statements, including, without limitation, statements regarding our future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as "believes," "intends," "expects," "anticipates," "estimates," "may," "will," "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors identified in "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or elsewhere in this Annual Report, as well as:
Our global operations expose us to geopolitical, regulatory, trade and tax risks that could adversely affect our business and financial results
Our global operations expose us to economic conditions, potential tax costs, political risks and specific regulations or restrictions in the countries in which we operate, which could materially and adversely impact our results of operations, financial position and cash flows.
We derive sales and earnings from operations in multiple countries and are subject to risks associated with doing business internationally. We have wholly-owned operations in the U.S., the U.K., Canada and China, as well as a joint venture in Japan. Risks of operating internationally include adverse changes in political, social, financial, economic or regulatory conditions; difficulty in staffing and managing geographically diverse operations; and the costs of complying with local laws and regulations.
Trade policy volatility has already affected our operations. For example, tariffs and other trade measures between the U.S. and China, as well as broader restrictions affecting certain metals, rare earth materials and industrial inputs, have increased input costs and created supply chain uncertainty in recent periods. These measures have also required pricing actions, alternative sourcing strategies and, in some cases, increased working capital to secure supply. Future changes — including additional tariffs, retaliatory measures, quotas, customs enforcement actions, sanctions or export controls — could further increase our costs, disrupt supply chains, reduce demand and/or require operational changes on short notice. Changes in trade measures between major trading regions could materially and adversely affect our results of operations, financial position and cash flows because our supply chains and customer base are global.
We are also subject to taxes in multiple jurisdictions. Our tax burden depends on the interpretation and application of local tax laws, administrative practices and treaties. Changes in tax laws, tax authority interpretations, audit positions, or the geographic mix of earnings could increase our tax expense, cash taxes and/or effective tax rate and could materially and adversely affect our results of operations, financial position and cash flows.
Our reliance on major customers increases exposure to reductions in demand, loss of business and credit risk
Our operations rely on a number of large customers in certain areas of our business, and the loss of any major customer, a reduction in demand by a major customer, or a customer payment default could materially reduce our sales and profitability. Long-term relationships are especially important because we often work closely with customers to develop products to meet particular specifications as part of the design of a product intended for an end-user market. The bespoke nature of many of our products could make it difficult to replace lost customers quickly, and the loss of a significant customer could materially and adversely impact our results of operations, financial position and cash flows.
Our top 10 customers accounted for approximately 38% of our net sales in 2025. Any significant reduction in sales or customer payment default could materially and adversely affect our results of operations, financial position and cash flows.
We depend upon our larger suppliers for a significant portion of our raw materials, and a loss of one of these suppliers, or a significant supply interruption could negatively impact our financial performance.
We rely to varying degrees on major suppliers for raw materials and components used in our engineered products, including aluminum, zirconium, magnesium, carbon fiber and rare earths. We generally purchase raw materials on a spot basis under standard terms and conditions and also maintain certain supply arrangements for key inputs. Supply disruptions, supplier financial distress, geopolitical events, trade restrictions, export controls, transportation constraints, or natural disasters could limit availability, increase lead times and raise costs. For example, our Elektron segment requires certain rare earth metals and oxides typically sourced from China for use in the manufacture of some magnesium alloys and in zirconium catalysts. The supply of these materials is subject to geopolitical, regulatory and trade risks, including export controls, licensing requirements and other government-imposed restrictions, the combined impact of which since the first half of 2025 has resulted in reduced availability and increased cost.
An interruption in the supply of essential raw materials or components, or a significant increase in costs due to shortages, quotas or other disruptions, could affect our ability to provide competitively priced products in a timely manner. In the event of supply constraints, we may need to purchase materials from alternative sources (potentially at higher prices), carry additional inventory, increase our prices, reduce margins or fail to meet delivery requirements, which could result in contractual penalties, loss of customer confidence and reduced future demand. We cannot assure that replacement materials would be available quickly on similar terms or at all. A prolonged or material disruption in the availability of raw materials could materially and adversely affect our results of operations, financial position and cash flows.
Volatility in raw material and energy costs, and limitations on passing through cost increases, could adversely affect margins and working capital
We are exposed to fluctuations in raw material and energy costs, including electricity and natural gas used in our manufacturing processes. We may not be able to pass cost increases through to customers immediately or at all due to fixed-price arrangements, competitive pressures or customer resistance. Significant increases in raw material or energy costs could reduce margins and/or increase working capital requirements, and higher input costs could make our products less attractive compared to alternatives (including competing products made from other materials), which could materially and adversely affect our results of operations, financial position and cash flows.
We are not dependent on any one supplier for our primary raw materials, but the business could be impacted by supply constraints. If, in the future, we are unable to obtain sufficient amounts of material on a timely basis, we may not be able to obtain raw materials from alternate sources at competitive prices. In addition, interruptions or reductions in our supply of raw materials could make it difficult to satisfy our customers’ delivery requirements, which could materially and adversely affect our business, financial condition, results of operations and cash flows.
Fluctuations in foreign exchange rates could adversely affect reported sales, earnings, cash flows and net assets
We conduct commercial transactions in multiple currencies. Changes in exchange rates can reduce reported sales and earnings from non-U.S. operations and can decrease the profits of subsidiaries that incur costs in currencies different from the currencies in which they generate revenue. These transaction risks principally arise as a result of purchases of raw materials in U.S. dollars, coupled with sales of products to customers in euros. This impact is most pronounced in our exports to continental Europe from the U.K. In 2025, our U.K. operations sold approximately €39 million of goods into the Eurozone.
In addition, we have operating subsidiaries located in the U.K., Canada, China and Australia, as well as a joint venture in Japan, each of whose revenue, costs, assets and liabilities are denominated in local currencies. As our consolidated financial statements are reported in U.S. dollars, we are exposed to fluctuations in those currencies when those amounts are translated to U.S. dollars for purposes of reporting our consolidated financial statements, which may cause declines in results of operations. The largest risk is from our operations in the U.K., which, in 2025, generated an operating profit of $4.1 million and sales of $109.7 million. Fluctuations in exchange rates, particularly between the U.S. dollar and GBP sterling can have a material effect on our consolidated income statement and consolidated balance sheet. In 2025, movements in the average U.S. dollar exchange rate had a positive impact on net sales of $4.3 million. In 2024 movements in the average U.S. dollar exchange rate had a positive impact on net sales of $3.7 million. Changes in translation exchange rates increased net assets by $12.6 million in 2025, compared to a decrease of $4.6 million in 2024.
We use forward foreign currency exchange contracts to hedge portions of certain exposures, but hedging may not fully offset currency impacts and exposes us to market and credit risk, including counterparty risk. Currency volatility could materially and adversely affect our results of operations, financial position and cash flows.
For additional information on these risks, and the historical impact on our results, see ITEM 7A.
Our defined benefit pension obligations and related regulatory requirements could require additional funding and adversely affect our financial position and cash flows
We have defined benefit pension arrangements in the U.K. and in the U.S.. In 2023, the Company completed a buyout of the U.S. BA Holdings, Inc. Pension Plan with our remaining U.S. plan being immaterial (see ITEM 8, Note 15). Our largest defined benefit plan, the Luxfer Group Pension Plan, ('the Plan') which closed to new members in 1998, remained open for accrual of future benefits based on career-average salary until April 5, 2016. Following a consultation, it was agreed with the Trustees and plan members to close the Plan to future benefit accrual effective April 5, 2016. In addition, when increasing pension benefit payments, it was agreed to use CPI as the reference index in place of RPI where applicable.
The Plan is funded in accordance with U.K. regulatory requirements and, as of December 31, 2025, and December 31, 2024, had an accounting surplus of $54.9 million and $49.3 million, respectively. There is no guarantee that the surplus funding position will be maintained and adverse market movements could result in a reversion to a deficit funding position. According to the latest triennial actuarial valuation of the Plan as of March 31, 2024, the Plan had a surplus of £20.8 million. No contributions were made to the Plan during 2025 or 2024. Based on the most recent actuarial valuation and the associated funding agreement with the Trustee, the Plan was not subject to deficit recovery contributions during this period. The Trustee may request additional contributions, and the U.K. Pensions Regulator (“TPR”) has the power to require further funding in certain circumstances. We remain legally responsible for ensuring that the Plan has sufficient assets to meet its obligations as they fall due.
Subsequent to year end, in January 2026, the Trustees completed a full buy-in transaction with a U.K. insurer, substantially matching the Plan’s benefit obligations with corresponding cash-flow payments. While this transaction significantly reduces the Plan’s exposure to investment and funding risks, the Company remains legally responsible for the Plan and subject to applicable regulatory requirements. The buy-in is designed to substantially match the Plan’s benefit obligations with corresponding cash flow payments from the insurer, with effect from March 2026, in exchange for an agreed premium. As this transaction occurred after the balance sheet date, the measurement of the Plan’s assets or liabilities as of December 31, 2025 did not account for this event. The buy-in does not constitute a settlement event under ASC 715 which would trigger settlement accounting.
Pension obligations and related cash requirements are sensitive to market conditions, actuarial assumptions (including discount rates, inflation and longevity), asset performance, regulatory developments and trustee decisions. While the buy-in has reduced exposure to many of these risks, adverse developments could still result in increased funding or security requirements and could materially and adversely affect our results of operations, financial position and cash flows.
Environmental and regulatory risks
The U.K. Pensions Regulator has statutory powers that could impose additional liabilities and restrict corporate activity
The U.K. Pensions Regulator has wide statutory powers that could, in certain circumstances, result in significant additional liabilities for the Group and restrict our ability to undertake corporate transactions.
The Pensions Regulator may issue a contribution notice or a financial support direction to participating employers in the Plan, other Group companies, or persons connected with or associated with those employers. Such action may be taken where an act or omission is considered to have avoided pension liabilities, materially weakened the likelihood of accrued benefits being paid, or where an employer is deemed to be insufficiently resourced. Any resulting liability may be as high as the difference between the pension plan’s assets and the cost of securing members’ benefits on a buy-out basis.
The Pension Schemes Act 2021 further expanded these powers, introducing new criminal and civil penalties (including unlimited fines) and additional notifiable-events requirements for certain corporate transactions. In practice, these powers may limit our ability to restructure the Group, dispose of businesses, or pay dividends, and may require us to provide additional funding or security to the pension plan. Any such requirements could materially and adversely affect our financial position, cash flows and results of operations.
Environmental laws and liabilities could require significant costs and adversely affect our financial position and results
Our operations are subject to environmental laws and regulations in the jurisdictions in which we operate. These regulations impose standards relating to emissions, wastewater discharges, hazardous materials handling, waste disposal, and soil and groundwater conditions, among other matters. Compliance requires ongoing costs, and we may incur liabilities for remediation and other obligations, including relating to historical activities and divested assets. We cannot assure that reserves, insurance or remediation plans will be adequate. Environmental liabilities, compliance failures or adverse regulatory changes could materially and adversely affect our results of operations, financial position and cash flows.
Health and safety regulations expose us to compliance costs and potential liabilities from workplace incidents
The health and safety of our employees and the safe operation of our business is subject to various health and safety regulations in each of the jurisdictions in which we operate. These regulations impose various obligations on us, including the provision of safe working environments and employee training on health and safety matters. Complying with these regulations involves recurring costs.
Regulatory approvals, certifications and export controls could limit our ability to sell products, enter markets or expand operations
Certain aspects of our operations are in highly regulated industries requiring product approvals, certifications and ongoing compliance. Requirements may vary across jurisdictions and can change over time. Delays in obtaining approvals, loss of certifications, changes in standards, or non-compliance could prevent us from selling products, entering markets, or expanding product lines and could subject us to penalties or other sanctions. We are also subject to export and import regulations with respect to certain products and materials.
Our customers are also often subject to similar regulations and risks. We therefore face the risk that our customers may have the demand for their products reduced as a result of regulatory matters that fall outside our direct control.
Any of these factors could materially and adversely affect our results of operations, financial position and cash flows.
Climate change regulation and evolving disclosure requirements could increase costs and expose us to legal, operational and reputational risks
Our manufacturing processes, and those of many of our suppliers and customers, are energy-intensive and may generate greenhouse gas emissions directly or indirectly. We are subject to existing and evolving climate-related laws, emissions reporting obligations, and market-based mechanisms in the jurisdictions where we operate and sell products. Compliance may require capital investment and ongoing costs, including for monitoring, reporting and verification of emissions data and for emissions allowances or other charges where applicable.
Climate-related disclosure expectations also continue to evolve and may develop inconsistently across jurisdictions. In the U.S., the SEC adopted climate-related disclosure rules in 2024, pending judicial review, and the SEC subsequently voted to end its defense of those rules, contributing to uncertainty regarding the scope and timing of any U.S. federal climate disclosure requirements. Regardless of U.S. federal outcomes, customers, investors, lenders and non-U.S. regulatory regimes may continue to drive increased climate-related reporting requirements and expectations. These developments could increase compliance costs, create legal and reputational risk, and materially and adversely affect our results of operations, financial position and cash flows.
Product liability, warranty and recall risks could result in significant costs, litigation and reputational harm
Because of the nature and use of certain of our products, we may face product liability, warranty or other claims for personal injury, death or property damage, including from failures of products manufactured by us or by third parties incorporating our components. Even where claimslack merit, defense costs and management distraction can be significant. Claims could result in decreased demand, loss of existing business, reputational harm, regulatory scrutiny, fines, litigation costs, product recalls and a decline in our stock price. We do not carry insurance to cover the full potential expense of product recalls, and liabilities in excess of insurance coverage could materially and adversely affect our results of operations, financial position and cash flows.
Cybersecurity threats, data breaches and evolving disclosure obligations could disrupt operations and expose us to legal and financial risk
We increasingly rely on information technology systems and third-party service providers and have access to in the course of our business operations confidential information and personally identifiable information. We have experienced, and expect to continue to be subject to, cybersecurity threats and incidents, including employee error or misuse and sophisticated targeted attacks. While we devote resources to security measures, no system can be guaranteed secure, and incidents affecting us or our third-party providers could result in business disruption, data loss, reputational harm, litigation, regulatory investigations or fines, and increased remediation and protection costs.
In addition, enhanced public company cybersecurity disclosure requirements may increase legal and reputational risk and may require accelerated public disclosure following a materiality determination, even while an incident is still being investigated. This could increase the likelihood of securities litigation and regulatory scrutiny and could create competitive sensitivity and increased costs. Failure to comply with applicable data protection laws, including the GDPR and U.K. GDPR, could result in significant fines and claims for compensation and could materially and adversely affect our results of operations, financial position and cash flows.
Future cybersecurity breaches, general information security incidents, further increases in data protection costs or failure to comply with relevant legal obligations regarding protection of data could thereforematerially and adversely affect our results of operations, financial position and cash flows. See ITEM 1C for further information regarding disclosed our Cybersecurity procedures.
Legacy liabilities from previously owned or divested businesses could result in future claims and financial exposure
We have sold or closed businesses over time. Products and services provided during prior periods may still give rise to claims, including product liability, environmental or other liabilities. Such claims could be costly and could materially and adversely affect our operations, financial position and cash flows.
Risks associated with products, technology and intellectual property
Our ability to protect intellectual property and proprietary information affects our competitive position and profitability
Our profitability depends in part on our ability to protect proprietary information and intellectual property rights. We rely on patents, trade secrets, trademarks and confidentiality agreements. Our intellectual property rights may be challenged, invalidated, circumvented or may not provide meaningful protection in all jurisdictions. Some key patents have expired or will expire in coming years, potentially reducing barriers to entry and increasing pricing pressure. If we cannot protect or enforce our rights, or if we are forced to rebrand products due to trademark challenges, our competitive position could suffer and our results of operations, financial position and cash flows could be materially and adversely affected.
Dependence on third-party intellectual property and potential infringementclaims could disrupt operations and increase costs
We license certain technologies from third parties and may be exposed to risks if licenses expire, terminate, are non-exclusive, or become unavailable on acceptable terms. We may also be subject to claims that our products or processes infringe third-party intellectual property. If such claims are successful, we could be required to pay damages, cease manufacturing certain products, redesign products, obtain costly licenses, or be prevented from entering certain markets. Defense costs and diversion of management attention could be significant and could materially and adversely affect our results.
Our performance depends on continued research, development and successfulinnovation
Our products are highly technical. To maintain and improve our market position, we depend on continued research and development and timely innovation. We may experience delays in development, or innovations may not achieve market acceptance or profitability. Competitive products and substitute materials may reduce demand for our offerings, and without timely improvements or new products, our existing products could become less competitive or obsolete, materially and adversely affecting our results of operations, financial position and cash flows.
We collaborate research with universities, and in addition spent $4.3 million, $4.4 million and $4.6 million in 2025, 2024 and 2023, respectively, on our own research and development activities. We expect to fund our future research and development expenditure requirements through operating cash flows and restricted levels of indebtedness, but if operating profit decreases, we may not be able to invest in research and development or continue to develop new products or enhancements.
Operational Risks
We may pursue acquisitions, which involve integration challenges, financial risks and uncertainty regarding expected benefits
We may pursue acquisitions as part of our strategy. Acquisitions and integrations involve risks, including unidentified liabilities, integration challenges, increased indebtedness, impairment charges, loss of key personnel, and distraction of management. We cannot assure that acquisitions will achieve anticipated benefits, and any adverse outcome could materially and adversely affect our results.
Failures to perform under supplier or customer contracts could result in penalties, loss of business and reputational harm
Failures to perform under supplier or customer contracts could result in penalties, damages, loss of business, or reputational harm. Certain supplier contracts may include minimum purchase commitments, and certain customer contracts may include firm delivery requirements. Demand weakness or operational disruptions could increase exposure under such provisions and could materially and adversely affect our results.
We rely on key personnel and skilled employees, and failure to attract or retain talent could adversely affect our operations
We rely on key executives and technical personnel. Loss of key personnel or inability to attract and retain qualified employees could harm our ability to execute strategy and maintain technical capabilities and could materially and adversely affect our results. We do not carry key person insurance covering the loss of any of our executives or employees.
Fraud, control failures or errors in finance processes could result in financial loss, misstatement and regulatory exposure
Our business relies on the accurate and timely processing of financial transactions and the proper operation of finance and accounting processes across the Group. These processes involve the use of manual inputs, judgment and reliance on information provided by employees and third parties. There is a risk that fraudulent transactions, unauthorized activities, misappropriation of assets or deliberatecircumvention of controls could occur, as well as a risk of errors arising from human error, inadequate segregation of duties, system limitations or process failures. Such incidents could result in financial losses, misstatement of our financial results, regulatory scrutiny, litigation, reputational harm and a loss of investor and stakeholder confidence. Any material failure to prevent, detect or correct fraudulent activity or significant errors within the finance process could materially and adversely affect our results of operations, financial position and cash flows.
Business interruptions at our production facilities could disrupt operations and adversely affect results and cash flows
Our production facilities could experience interruptions due to severe weather, natural disasters, fires, explosions, equipment failure, utility outages, terrorism, pandemics or labor disruptions. Some products and processes involve materials that are flammable or potentially explosive if mishandled. Such events could cause injuries, property damage, environmental harm, operational disruptions and reputational damage. Insurance may not cover all losses, and interruptions could materially and adversely affect our results and cash flows.
Labor relations and reliance on unionized workforces could disrupt operations and increase costs
Some facilities rely on unionized labor. Strikes, lock-outs, labor disputes or other work stoppages could disrupt operations and materially and adversely affect our results.
We depend on distributions from subsidiaries to meet obligations, and restrictions could limit our ability to fund operations or dividends
Luxfer Holdings PLC operates through subsidiaries and depends on distributions from those subsidiaries to fund obligations, dividends and corporate activities. Subsidiary distributions may be restricted by law, contractual arrangements, and operating needs. If subsidiaries are unable to make distributions, our ability to fund operations, service debt or pay dividends may be adversely affected.
Our indebtedness and financing arrangements could limit flexibility and expose us to refinancing and interest rate risk
Our indebtedness could affect our ability to fund working capital, capital expenditures, acquisitions and dividends. Debt agreements contain restrictive covenants that may limit strategic flexibility. Rising interest rates could increase interest expense on floating-rate debt. If we cannot generate sufficient cash to service debt or refinance maturities on acceptable terms, we may need to refinance, sell assets, reduce investment, or raise equity, any of which could materially and adversely affect our business and results.
As of December 31, 2025, we had $25.0 million of indebtedness under our senior notes (the "Loan Notes") due in 2026. There was also a $15.3 million drawn balance on the revolving credit facility ("RCF"), with $109.7 million of headroom remaining as of December 31, 2025. In July 2025 we completed a refinance of our shelf facility, the terms of this remaining the same, with expiry now in July 2030 as opposed to October 2026.
General risks
Future dividends are at the discretion of our Board and may be reduced or suspended based on financial and legal constraints
Future dividends are at the discretion of our Board and depend on many factors, including results of operations, cash requirements, debt facilities, financial position, contractual restrictions and applicable laws. Under English law, dividends may be paid only from profits available for distribution. Any change in dividend levels, or suspension of dividends, could adversely affect the market price of our ordinary shares.
Compliance with U.S. securities laws and internal control requirements could result in increased costs and expose us to reporting and control risks
As a U.S. public company, we are subject to extensive U.S. securities law reporting requirements, including obligations to design, maintain, and assess the effectiveness of internal control over financial reporting. These controls provide reasonable, not absolute, assurance that financial information is reliable and that fraud is prevented or detected. Failure to maintain effective internal controls could result in inaccurate financial reporting, inability to prevent or detect fraud, loss of investor confidence, regulatory scrutiny, and a decline in the market price of our ordinary shares. In addition, compliance with these reporting and control requirements places a significant and ongoing strain on management's time and operational, and financial resources, as management must evaluate and report on the effectiveness of internal controls annually under Section 404(a) and quarterly under Section 302 of the Sarbanes-Oxley Act, which includes ongoing system and process evaluation and testing.
Our incorporation outside the United States and the location of certain directors, officers and assets may make it difficult to enforce U.S. judgments
Luxfer is incorporated in England and Wales, and certain directors and officers reside outside the U.S. A substantial portion of our assets and the assets of such persons are located outside the U.S. As a result, it may be difficult to effect service of process within the U.S. or to enforce U.S. judgments against the Company or such persons based on U.S. federal securities laws.
• general economic conditions, or conditions affecting demand for the services offered by us in the markets in which we operate, both domestically and internationally, being less favorable than expected;
• worldwide economic and business conditions and conditions in the industries in which we operate;
• potential or actual tariffs, and other political risks worldwide;
• future pandemics;
• fluctuations in the cost and / or availability of raw materials, including Chinese rare earths, labor and energy, as well as our ability to pass on cost increases to customers;
• currency fluctuations and other financial risks;
• our ability to protect our intellectual property;
• the amount of indebtedness we have incurred and may incur, and the obligations to service such indebtedness and to comply with the covenants contained therein;
• relationships with our customers and suppliers;
• increased competition from other companies in the industries in which we operate;
• changing technology;
• our ability to execute and integrate new acquisitions;
• claims for personal injury, death or property damage arising from the use of products produced by us;
• the occurrence of accidents or other interruptions to our production processes;
• changes in our business strategy or development plans, and our expected level of capital expenditure;
• our ability to attract and retain qualified personnel;
• restrictions on the ability of Luxfer Holdings PLC to receive dividends or loans from certain of its subsidiaries;
• climate change regulations and the potential impact on energy costs;
• regulatory, environmental, legislative and judicial developments; and
• our intention to pay dividends.
Please read the sections "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Annual Report on Form 10-K for a more complete discussion of the factors that could affect our performance and the industries in which we operate, as well as those discussed in other documents we file or furnish with the SEC.
About Luxfer
Luxfer Holdings PLC ("Luxfer," "the Company," "we," "our") is a global industrial company innovating niche applications in materials engineering. Luxfer focuses on value creation by using its broad array of technical know-how and proprietary technologies to help create a safe, clean and energy-efficient world. Luxfer's high performance materials, components and high-pressure gas containment devices are used in defense, first response and healthcare, transportation and specialty industrial applications.
Key trends regarding our existing business
Operating objectives and trends
In 2026, we expect the following operating objectives and trends to impact our business:
• Focus on navigating near-term uncertainties while maintaining strategic discipline for long-term growth;
• Completion of recently launched centers of excellence programs involving footprint optimization, manufacturing excellence through automation and margin improvement;
• Navigating market volatility, tariffs and wider impact from these, including alternative sourcing arrangements for rare earth materials;
• Execution of select capital investment projects to support our strategy of profitable growth while improving our infrastructure;
• Continued emphasis on operating cash generation and maintaining strong working capital performance; and
• Focus on recruiting, developing, maintaining talent, and driving a high-performance culture.
• Continued evaluation of strategic alternatives in response to the strategic review concluded in 2024.
CONSOLIDATED RESULTS OF OPERATIONS
The consolidated results of operations from continuing operations of Luxfer were as follows:
Years ended December 31,
% / point change
In millions
Net sales
Cost of sales
Gross profit
% of net sales
Selling, general and administrative expenses
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Research and development
% of net sales
Restructuring charges
% of net sales
Impairment charges
% of net sales
Disposal related costs
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Other (costs) / income
% of net sales
Gain on disposal of assets held-for-sale
% of net sales
Operating income
% of net sales
Net interest expense
% of net sales
Defined benefit pension credit / (charge)
% of net sales
Income / (loss) before income taxes
% of net sales
(Provision) / credit for income taxes
Effective tax rate
Net income / (loss) from continuing operations
% of net sales
Net sales
Adjusting for foreign exchange tailwinds of $3.0 million (2024: tailwind of $1.7 million), and excluding Graphic Arts sales of $13.4 million (2024: $29.6 million) consolidated net sales have increased by $5.9 million or 1.6% in 2025 from 2024. Lower volumes and unfavorable mix reduced sales by $0.5 million, more than offset by $6.4 million from the pass-through of price increases.
Excluding Graphic Arts, sales in our Specialty Industrial and Defense, First Response and Healthcare end market have increased by 11.9% and 2.9% respectively, whilst our sales in our Transportation end market have decreased by 4.8%.
Revenue was positively impacted from:
• Strong sales of Meals Ready to Eat (MREs) and Unitized Group Rations (UGR-E);
• Greater demand for magnesium aerospace alloys;
• Increased sales of magnesium powders for both commercial and defense use; and
• Higher demand for cylinders used in aerospace and space exploration projects.
These increases have been partially offset by:
• Significant reduction in Alternative Fuel cylinder sales, as well as those used for SCBA and medical purposes; and
• Decrease in sales of zirconium powders, specifically those used for automotive catalysis.
Gross profit
Excluding Graphic Arts there was a 0.8 percentage point increase in gross profit as a percentage of sales in 2025 from 2024. This increase was primarily the result of positive sales mix, pricing discipline and continued operational execution across end markets, partially offset by the impact of higher fixed costs in the Elektron division linked to increased volumes and infrastructure investment.
Selling, general and administrative expenses ("SG&A")
Excluding Graphic Arts, SG&A costs as a percentage of sales have increased by 0.5 percentage points in 2025 from 2024.
Research and development costs
Excluding Graphic Arts, research and development costs as a percentage of sales remained flat in 2025 from 2024.
Restructuring charges
The $9.0 million restructuring charges in 2025 predominantly relates to costs aimed at reducing our fixed cost structure and generating savings through enhanced operational alignment, in particular to centralize our North American gas cylinders and magnesium powders businesses. We ceased manufacturing at our Pomona, California facility in December 2025.
As part of this initiative, we recognized impairment charges of $3.8 million related to property, plant and equipment in accordance with ASC 360, and $1.9 million related to right-of-use assets from operating leases in accordance with ASC 842, which applies the long-lived asset impairment model in ASC 360. The impairments were triggered by a strategic decision to relocate operations, resulting in the affected assets no longer being used for their originally intended period. Asset impairments of $0.8 million were recognized in relation to inventory to reflect inventory no longer recoverable as part of the relocation.
The remaining $2.5 million restructuring charge related to severance and other costs.
Disposal related costs
On July 2, 2025, the Company completed the divesture of its Graphic Arts business to Vulcan Metals Specialty Products, Inc., a newly created affiliate of TerraMar Capital LLC. Graphic Arts was previously reported as a separate operating segment under ASC 280.
The Company recognized a net loss on held-for-sale asset group of $1.9 million. Additional costs of $0.1 million represent professional fees incurred prior to the completion of the disposal of the Graphic Arts business.
In 2024 disposal related costs of $12.2 million were incurred in relation to the divestiture of our Graphic Arts segment. $9.8 million represents a loss on held-for-sale asset group to reflect its fair value at that time and $2.4 million represents professional fees.
Other (Costs) / income
Other Income of $7.7 million in 2024 relates to the recovery of legal costs from our insurer related to the previously disclosed US Ecology case, (see Note 20). Historically the legal costs relating to this case were in selling, general and administrative expenses.
In 2025, other costs of $0.8 million relate to fees incurred in relation the Company’s ongoing strategic review.
Gain on Disposal of assets held for sale
The $6.1 million gain on disposal recognized in 2024 was in relation to the sale of previously disclosed held-for-sale land and buildings in our Elektron division. Net consideration of $7.3 million was received in the fourth quarter of 2024.
Net interest expense
Net interest expense of $3.1 million in 2025 decreased from $5.2 million in 2024 primarily due to the lower average drawings on the revolving credit facility.
Defined benefit pension credit
The defined benefit pension credit of $1.3 million in 2025 relates to the U.K. plan and was broadly consistent with the $1.6 million credit recognized in 2024.
Provision for income taxes
The 10.1 percentage point increase in the effective tax rate in 2025 from 2024 was primarily due to difference of basis in accounting and state taxes.
2024 compared with 2023
For a discussion comparing our consolidated operating results for the year ended December 31, 2024, with the year ended December 31, 2023, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation - Discussion and Analysis - Consolidated Operating Results in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on February 25, 2025. This section is incorporated by reference into this Annual Report on Form 10-K for the year ended December 31, 2025.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
The following tables of non-GAAP summary financial data presents a reconciliation of net income from continuing operations and diluted earnings per ordinary share from continuing operations to adjusted net income from continuing operations, adjusted EBITA from continuing operations, adjusted income from continuing operations before income taxes, adjusted EBITDA from continuing operations, adjusted EBITDA excluding legal cost recovery, adjusted earnings per ordinary share from continuing operations, adjusted provision for income taxes and adjusted effective tax rate from continuing operations, for the periods presented, being the most comparable GAAP measures. Management believes that adjusted net income excluding legal cost recovery, adjusted earnings per share, adjusted EBITA and adjusted EBITDA excluding legal cost recovery are key performance indicators ("KPIs") used by the investment community and that such presentation will enhance an investor’s understanding of the Company's operational results. In addition, Luxfer's CEO and other senior management use these KPIs, among others, to evaluate business performance. However, investors should not consider adjusted net income from continuing operations, adjusted earnings per share from continuing operations, adjusted EBITA from continuing operations and adjusted EBITDA excluding legal cost (recovery) from continuing operations in isolation as an alternative to net income and earnings per share when evaluating Luxfer's operating performance or measuring Luxfer's profitability. In 2024, the Company initiated a process to divest the Graphic Arts business which was concluded in July 2025. While Graphic Arts did not meet the 'strategic shift' criteria outlined in ASC 205-20 for it to be classified as a discontinued operation, management believed it is appropriate in the tables below to separate out the results of Graphic Arts in order to provide a more complete financial summary for the period. Similarly for other income of $7.7 million in 2024 relates to the recovery of legal costs from our insurer related to the previously disclosed US Ecology case, historically the legal costs relating to this case were in selling, general and administrative expenses, however the other income in 2024 is separated due to its one-off nature and the recovery relating to several years. We believe separating the income and costs relating to this is also appropriate to provide a more complete financial summary for the period.
Year-to-date
In millions except per share data
Continuing operations
Graphic Arts
Adjusted Total
Continuing operations
Graphic Arts
Adjusted Total
Net income / (loss)
Accounting charges relating to acquisitions and disposals of businesses:
Amortization on acquired intangibles
Disposal related costs
Defined benefit pension credit
Restructuring charges
Gain on disposal of assets held-for-sale
Other costs
Share-based compensation charge
Income tax on adjusted items
Adjusted net income / (loss)
Less:
Legal cost recovery
Tax on legal cost recovery
Adjusted net income / (loss) excluding legal
Adjusted earnings / (loss) per ordinary share (1)
Diluted earnings / (loss) per ordinary share
Impact of adjusted items
Adjusted diluted earnings / (loss) per ordinary share
(1) For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares outstanding during the financial year has been adjusted for the dilutive effects of all potential ordinary shares and share options granted to employees.
Year-to-date
In millions except per share data
Continuing operations
Graphic Arts
Adjusted Total
Continuing operations
Graphic Arts
Adjusted Total
Adjusted net income / (loss)
Add back:
Income tax on adjusted items
Income tax expense
Net finance costs
Adjusted EBITA
Loss on disposal of property, plant and equipment
Depreciation
Adjusted EBITDA
Less:
Legal cost recovery
Adjusted EBITDA excluding legal
Year-to-date
In millions except per share data
Continuing operations
Graphic Arts
Adjusted Total
Continuing operations
Graphic Arts
Adjusted Total
Adjusted net income / (loss)
Add back:
Income tax on adjusted items
Provision / (credit) for income taxes
Adjusted income / (loss) before income taxes
Adjusted provision / (credit) for income taxes
Adjusted effective tax rate
In millions
Gas Cylinders
Elektron
Graphic Arts
Total
Segment adjusted EBITA
Depreciation
Segment adjusted EBITDA
In millions
Gas Cylinders
Elektron
Graphic Arts
Total
Segment adjusted EBITA
Depreciation
Loss on disposal of property, plant and equipment
Segment adjusted EBITDA
In millions
Gas Cylinders
Elektron
Graphic Arts
Total
Segment adjusted EBITA
Depreciation
Segment adjusted EBITDA
SEGMENT RESULTS OF OPERATIONS
The summary that follows provides a discussion of the results of operations of each of our three reportable segments during the year (Gas Cylinders, Elektron and Graphic Arts). The Graphic Arts business was sold on July 2, 2025. These segments comprise various product offerings that serve multiple end-markets.
Adjusted EBITA, which is our segment income metric, represents net income from continuing operations adjusted for share-based compensation charges, restructuring charges, impairment charges, disposal costs, loss / (gain) on disposal of assets held-for-sale, net interest expenses, defined benefits pension credit, provision for taxes and amortization. A reconciliation to pre-tax income can be found in ITEM 8, Note 18. Adjusted EBITDA, as shown below, represents adjusted EBITA less depreciation. Management believes that adjusted EBITA and adjusted EBITDA are key performance indicators ("KPIs") used by the investment community and that such presentation will enhance an investor’s understanding of the Company's operational results. Adjusted EBITDA is reconciled to adjusted EBITA above.
GAS CYLINDERS
The results of operations from the Gas Cylinders segment are for continuing operations only.
The net sales, adjusted EBITA and adjusted EBITDA for Gas Cylinders were as follows:
Years ended December 31,
% / point change
In millions
Net sales
Adjusted EBITA
Adjusted EBITDA
Adjusted EBITA % of net sales
Adjusted EBITDA % of net sales
Net sales
The 6.2% decrease in Gas Cylinders sales in 2025 from 2024 was primarily the result of:
• Continued softness in demand of Alternative Fuels cylinders;
• Lower sales of medical and SCBA cylinders.
These decreases have been partially offset by:
• Gains in sales of aerospace cylinders, which serve commercial aircraft and space exploration programs.
Adjusted EBITA
The 1.1 percentage point decrease in adjusted EBITA for Gas Cylinders as a percentage of net sales in 2025 from 2024 is the result of adverse sales mix partially offset by price and a foreign exchange tailwind.
Adjusted EBITDA
The 1.1 percentage point decrease in adjusted EBITDA for Gas Cylinders as a percentage of net sales in 2025 from 2024 is the result of the decrease in adjusted EBITA as a percentage of net sales.
ELEKTRON
The net sales, adjusted EBITA and adjusted EBITDA for Elektron were as follows:
Years ended December 31,
% / point change
In millions
Net sales
Adjusted EBITA
Adjusted EBITDA
Adjusted EBITA % of net sales
Adjusted EBITDA % of net sales
Net sales
The 11.6% increase in Elektron sales in 2025 from 2024 was primarily the result of:
• Significant increase in sales of Meals Ready to Eat ("MREs") and Unitized Group Rations "(UGR-E");
• Increase in sales of magnesium powders for both commercial and defense use;
• Continued recovery in sales of magnesium aerospace alloys; and
• Improved demand for oil and gas alloys.
These increases were partially offset by:
• Decrease in sales of zirconium powders for both commercial and defense use; and
• Lower sales of automotive catalysis materials.
Adjusted EBITA
The 3.2 percentage point decrease in adjusted EBITA for Elektron as a percentage of net sales in 2025 from 2024 is the result of adverse price and a foreign exchange headwind.
Adjusted EBITDA
The 3.6 percentage point decrease in adjusted EBITDA for Elektron as a percentage of net sales in 2025 from 2024 was predominantly the result of the decrease in adjusted EBITA as a percentage of net sales.
GRAPHIC ARTS
The net sales, adjusted EBITA and adjusted EBITDA for Graphic Arts were as follows:
Years ended December 31,
% / point change
In millions
Net sales
Adjusted EBITA
Adjusted EBITDA
Adjusted EBITA % of net sales
Adjusted EBITDA % of net sales
On July 2, 2025, the Company completed the divesture of its Graphic Arts business to Vulcan Metals Specialty Products, Inc., a newly created affiliate of TerraMar Capital LLC. Graphic Arts was previously reported as a separate operating segment under ASC 280. Following the disposal, Graphic Arts will no longer be presented as a reportable segment. The Company recognized a net loss on held-for-sale asset group of $1.9 million in 2025.
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity requirements arise primarily from obligations under our indebtedness, capital expenditures, acquisitions, the funding of working capital and the funding of hedging facilities to manage foreign exchange and commodity purchase price risks. We meet these requirements primarily through cash flows from operating activities, cash deposits and borrowings under the Revolving Credit Facility and accompanying ancillary hedging facilities and the Loan Note due in 2026. Our principal liquidity needs are:
• funding acquisitions, including deferred contingent consideration payments;
• capital expenditure requirements;
• payment of shareholder dividends;
• servicing interest on the Loan Notes, which is payable at each quarter end, in addition to interest and / or commitment fees on the Senior Facilities Agreement;
• working capital requirements, particularly in the short term as we aim to achieve organic sales growth; and
• hedging facilities used to manage our foreign exchange risks.
We believe that, in the long term, cash generated from our operations will be adequate to meet our anticipated requirements for working capital, capital expenditures and interest payments on our indebtedness. In the short term, we believe we have sufficient credit facilities to cover any variation in our cash flow generation. However, any major repayments of indebtedness will be dependent on our ability to raise alternative financing or to realize substantial returns from operational sales, in July 2025 we completed a refinance of our shelf facility, the terms of this remaining the same, with expiry now in July 2030. Our ability to expand operations through sales development and capital expenditures could be constrained by the availability of liquidity, which, in turn, could impact the profitability of our operations.
We have been in compliance with the covenants under the Loan Notes and the RCF throughout all of the quarterly measurement dates from and including September 30, 2011, to December 31, 2025. In July 2025 we completed a refinance of our shelf facility, the terms of this remaining the same, with expiry now in July 2030 as opposed to October 2026.
Luxfer conducts all of its operations through its subsidiaries and joint ventures. Accordingly, Luxfer's main cash source is dividends from its subsidiaries. The ability of each subsidiary to make distributions depends on the funds that a subsidiary receives from its operations in excess of the funds necessary for its operations, obligations or other business plans. We have not historically experienced any material impediment to these distributions, and we do not expect any local legal or regulatory regimes to have any impact on our ability to meet our liquidity requirements in the future. In addition, since our subsidiaries are wholly-owned, our claims will generally rank junior to all other obligations of the subsidiaries. If our operating subsidiaries are unable to make distributions, our growth may slow, unless we are able to obtain additional debt or equity financing. In the event of a subsidiary's liquidation, there may not be assets sufficient for us to recoup our investment in the subsidiary.
Our ability to maintain or increase the generation of cash from our operations in the future will depend significantly on the competitiveness of and demand for our products, including our success in launching new products. Achieving such success is a key objective of our business strategy. Due to commercial, competitive and external economic factors, however, we cannot guarantee that we will generate sufficient cash flows from operations or that future working capital will be available in an amount sufficient to enable us to service our indebtedness or make necessary capital expenditures.
Cash Flows from Continuing Operations
Operating activities
Cash provided by operating activities was $34.0 million and $51.1 million in 2025 and 2024 respectively, which includes approximately $2.3 million and $5.0 million of cash spent on restructuring activities in those years. Cash was primarily related to the net income from operating activities, net of the following non-cash items: depreciation and amortization; share-based compensation charges; pension credit; gain on disposal of held for sale assets; loss on held-for-sale asset group and net changes to assets and liabilities. In 2025 and 2024 cash flow was positively impacted by the $1.9 million and $5.8 million, respectively, receipt arising from the reimbursement of legal costs in relation to the previously disclosed US Ecology case.
Investing activities
Net cash used for investing activities was $4.9 million in 2025, compared to $3.4 million in 2024. The following investing activities impacted our cash flow:
Capital expenditures
Capital expenditures in 2025 was $7.8 million compared to $10.3 million in 2024, with an additional $0.4 million purchasing intangible assets in 2024. We anticipate capital expenditures for 2026 to be between $15 million and $20 million.
Proceeds from assets held for sale
In September 2024, the Company sold a previously held-for-sale building in the Elektron segment for $7.3 million. Consideration was paid in full in October 2024.
Proceeds from sale of businesses
On July 2, 2025, the Company completed the divesture of its Graphic Arts business to Vulcan Metals Specialty Products, Inc., a newly created affiliate of TerraMar Capital LLC, with net proceeds of $2.9 million being received in 2025.
Financing activities
In 2025, net cash used in financing activities was $25.0 million, (2024: $44.0 million). During the year, the Company repaid $3.1 million of bank overdrafts (2024: $1.5 million repaid), made net repayments of $3.2 million on its borrowing facilities (2024: net repayments of $25.7 million) and incurred $0.9 million of costs related to the refinancing of its shelf facility (2024: nil).
Dividend payments totaled $13.9 million in 2025 (2024: $14.0 million), representing $0.52 per ordinary share in both periods
In addition, during 2025, the Company spent $3.1 million repurchasing 246,875 shares, (2024: $2.3 million repurchasing 200,000 shares) and paid $0.8 million in settling share based compensation awards (2024: $0.5 million).
Loan Note 2026
The Note Purchase Agreement contains customary covenants and events of default, in each case with customary and appropriate grace periods and thresholds. In addition, the Note Purchase Agreement requires us to maintain compliance with a minimum interest coverage ratio and a leverage ratio. The interest coverage ratio measures our EBITDA (as defined in the Note Purchase Agreement) to Net Finance Charges (as defined in the Note Purchase Agreement). We are required to maintain an interest coverage ratio of 4.0:1. The leverage ratio measures our Total Net Debt (as defined in the Note Purchase Agreement) to Adjusted Acquisition EBITDA (as defined in the Note Purchase Agreement). We are required to maintain a leverage ratio of no more than 3.0:1. We have been in compliance with the covenants under the Note Purchase Agreement throughout all of the quarterly measurement dates from and including September 30, 2011, to December 31, 2025. The Loan Note due 2026 and the Note Purchase Agreement are governed by the law of the State of New York.
The Loan Note due 2026 is denominated in U.S. dollars, which creates a natural partial offset between the dollar-denominated net assets and earnings of our U.S. operations and the dollar-denominated debt and related interest expense of the notes. We have included the Note Purchase Agreement and a form of the Loan Note due 2026 as exhibits to this Annual Report and refer you to the exhibits for more information on the Note Purchase Agreement and the Loan Note due 2026.
Senior Facilities Agreement
Our Senior Facilities Agreement was refinanced in July 2025, for more information see Note 12.
Structure. At December 31, 2025 the Senior Facilities Agreement provided $125 million of committed debt facilities in the form of a multi-currency (GBP sterling, U.S. dollars or euros) RCF and an additional $25 million of uncommitted facilities through an accordion clause. The facilities mature in July 2030. As of December 31, 2025, we had drawn down $15.3 million under the Revolving Credit Facility (December 31, 2024: $17.2 million).
Availability. T he facility is used for loans and overdrafts. Amounts unutilized under the RCF (or, if the case, under the revolving portion of the accordion) are allocated to ancillary facilities available under the Senior Facilities Agreement in connection with overdraft facilities, bilateral loan facilities and letter of credit facilities. As of December 31, 2025, we had drawn down $3.5 million under the ancillary facilities (December 31, 2024: $2.8 million). We may use amounts drawn under the RCF for our general corporate purposes and certain capital expenditures, as well as for the financing of permitted acquisitions and reorganizations. As of December 31, 2025, $109.7 million (net of $15.3 million drawn down) was available under the RCF. The last month in which we may draw funds from the RCF is June 2030.
The Company also had a separate (uncommitted) bonding facility for bank guarantees; denominated in GBP sterling totaling £0.5 million ($0.7 million) and £0.1 million ($0.2 million) was utilized at December 31, 2025.
Interest rates and fees. Borrowings under the facility bear an interest rate equal to an applicable margin plus either EURIBOR, in the case of amounts drawn in euros, or SONIA (Sterling Overnight Index Average), in the case of amounts drawn in GBP sterling or U.S. dollars.
The tables below sets out the range of ratios and the related margin percentage currently in effect.
Leverage
Margin
(% per annum)
Greater than 2.5:1
Less than or equal to 2.5:1, but greater than 2.0:1
Less than or equal to 2.0:1, but greater than 1.5:1
Less than or equal to 1.5:1, but greater than 1.0:1
Less than or equal to 1.0:1
As of December 31, 2025, we had drawn down $15.3 million under the RCF (December 31, 2024: $17.2 million). A commitment fee is levied each quarter against any unutilized element of the RCF, excluding overdraft or ancillary facilities.
In the event of a sale of all or substantially all of our business and / or assets, or if any person or group of persons acting in concert gains direct or indirect control (as defined in the Senior Facilities Agreement) of Luxfer Holdings PLC, we will be required to immediately repay all outstanding amounts under the RCF (and, if the case, the accordion) and the ancillary facilities under the Senior Facilities Agreement.
In addition, the Senior Facilities Agreement requires us to maintain compliance with an interest coverage ratio and a leverage ratio. The interest coverage ratio measures our EBITDA (as defined in the Senior Facilities Agreement) to Net Finance Charges (as defined in the Senior Facilities Agreement). We are required to maintain a minimum interest coverage ratio of 4.0:1. The leverage ratio measures our Total Net Debt (as defined in the Senior Facilities Agreement) to the Relevant Period Adjusted Acquisition EBITDA (as defined in the Senior Facilities Agreement). We are required to maintain a leverage ratio of no more than 3.0:1.
We have been in compliance with the covenants under the Senior Facilities Agreement throughout all of the quarterly measurement dates from and including September 30, 2011, to December 31, 2025.
The Senior Facilities Agreement is governed by English law. For more information see ITEM 8, Note 12.
Dividends
We paid dividends in 2025 of $13.9 million (2024: $14.0 million), or $0.52 per share in both years
Any payment of dividends is also subject to the provisions of the U.K. Companies Act, according to which dividends may only be paid out of profits available for distribution determined by reference to financial statements prepared in accordance with the Companies Act and the International Accounting Standards Board, which differ in some respects from U.S. GAAP. In the event that dividends are paid in the future, holders of the ordinary shares will be entitled to receive payments in U.S. dollars in respect of dividends on the underlying ordinary shares in accordance with the deposit agreement. Furthermore, because we are a holding company, any dividend payments would depend on cash flows from our subsidiaries.
Authorized shares
Our authorized share capital consists of 40.0 million ordinary shares with a par value of £0.50 per share.
Contractual obligations
The following summarizes our significant contractual obligations that impact our liquidity:
Payments Due by Period
In millions
Total
Less than
1 year
years
years
After
5 years
Contractual cash obligations
Loan Notes due 2026
Revolving Credit Facility due July 2030
Obligations under operating leases
Capital commitments
Interest payments
Total contractual cash obligations
2024 compared with 2023
For a discussion comparing our net cash activities (operating, investing and financing) for the year ended December 31, 2024, with the year ended December 31, 2023, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation - Discussion and Analysis - Consolidated Operating Results in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on February 25, 2025. This section is incorporated by reference into this Annual Report on Form 10-K for the year ended December 31, 2025.
Off-balance sheet measures
At December 31, 2025, we had no off-balance sheet arrangements other than the three bonding facilities as described above.
COMMITMENTS AND CONTINGENCIES
Capital commitments
At December 31, 2025, the Company had capital expenditure commitments of $2.2 million (2024: $0.5 million and 2023: $2.3 million) for the purchase of new plant and equipment.
Committed banking facilities
At December 31, 2025 and December 31, 2024 the Company had committed banking facilities of $125.0 million with an additional $25.0 million of uncommitted facilities through an accordion provision. Of these committed facilities, $15.3 million was drawn at December 31, 2025 ($17.2 million December 31, 2024). The banking facilities expire in October 2026.
Contingencies
In December 2023, it was established that any potential liability arising from the lawsuits and reasonable defense costs related to the previously disclosed US Ecology case are covered by insurance. The Company recognized $7.7 million in the twelve months of 2024, in relation to recovery of these costs previously incurred by the Company. $5.8 million cash was received in 2024 with a further $1.9 million received in 2025.
In January 2025, a final settlement was agreed upon related to the US Ecology case which was covered in full by the Company's insurance policy, with payment received in February 2025. As a result, the Company recorded a liability for the settlement in other current liabilities and recognized a gain contingency related to the insurance payout receivable in accounts and other receivables as at December 31, 2024, nil at December 31, 2025.
In April 2025, the Office of DefectsInvestigation (ODI) of the National Highway Traffic Safety Administration (NHTSA) opened a Preliminary Evaluation to investigateallegations of compressed natural gas (CNG) fuel leaks in certain CNG fuel systems, equipped with certain Luxfer Type 4 CNG fuel containers. Luxfer is fully co-operating with this Preliminary Evaluation, which has a range of potential outcomes, and at this stage Luxfer is not able to estimate the potential financial impact. Luxfer does not believe that this alleged issue poses an unreasonable risk to motor vehicle safety.
In July 2025, in accordance with the Luxfer Graphic Arts sale agreement, the Company has fully indemnified the purchaser for certain identified environmental matters relating to the Madison Illinois site, which we estimate will cost approximately $1.0 million to close out. A provision for these obligations has been recognized and is included within other current liabilities in the Consolidated Balance Sheet.
Additionally, we have provided indemnification for any unidentified environmental matters that may have occurred between 2003 (the year of the original acquisition by Luxfer) and July 2025, capped at $10.0 million and / or 5 years.
Also, in 2025, the Company recognized a provision in relation to dilapidation obligations associated with the former Superform U.K. site sold in 2021, for which the Group remains a guarantor under the relevant lease arrangements following disposal of the business. The obligation reflects management’s best estimate of the costs required to settle the remaining property reinstatement and exit obligations.
NEW ACCOUNTING STANDARDS
See ITEM 8, Note 1 of the notes to the Consolidated Financial Statements, included in this Form 10-K, for information pertaining to recently adopted accounting standards or accounting standards to be adopted in the future.
CRITICAL ACCOUNTING ESTIMATES
We have adopted various accounting policies to prepare the consolidated financial statements in accordance with GAAP. Our significant accounting policies are more fully described in ITEM 8, Note 1 of the Notes to Consolidated Financial Statements. Certain accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, our observance of trends in the industry and information available from other outside sources, as appropriate. We consider an accounting estimate to be critical if:
• it requires us to make assumptions about matters that were uncertain at the time we were making the estimate; and
• changes in the estimate or different estimates that we could have selected would have had a material impact on our financial condition or results of operations.
Our critical accounting estimates include the following:
U.K. Defined Benefit Pension Plan
The Company operates a funded defined benefit pension plan in the U.K., and immaterial plans in the U.S. and France. The amounts recognized in our consolidated financial statements related to our defined-benefit pension and other post-retirement plans are determined from actuarial valuations. Inherent in these valuations are assumptions, including: (i) discount rates; (ii) inflation rates; (iii) pension increases; and (iv) life expectancy. These assumptions are updated annually and are disclosed in ITEM 8, Note 15 to the Notes to Consolidated Financial Statements. Differences in actual experience or changes in assumptions can have a material impact on the pension and other post-retirement obligations and future expense.
We recognize changes in the fair value of plan assets and net actuarial gains or losses for pension and other post-retirement benefits annually in the fourth quarter each year ("mark-to-market adjustment") and, if applicable, in any quarter in which an interim remeasurement is triggered. Net actuarial gains and losses occur when the actual experience differs from any of the various assumptions used to value our pension and other post-retirement plans or when assumptions change as they may each year. The primary factors contributing to actuarial gains and losses each year are (i) changes in the discount rate used to value pension and other post-retirement benefit obligations as of the measurement date and (ii) differences between the expected and the actual return on plan assets. This accounting method also results in the potential for volatile and difficult to forecast mark-to-market adjustments. The remaining components of pension expense, including service and interest costs and the expected return on plan assets, are recorded on a quarterly basis as ongoing pension expense. The latest triennial actuarial valuation of the Plan was carried out in March 31, 2024, the Plan had a surplus of £20.8 million (compared with a £12.2 million deficit at the previous valuation in April 2021).
Discount rate
The discount rate used represents the annualized yield based on a cash flow matched methodology with reference to an AA corporate bond spot curve and having regard to the duration of the Plan’s liabilities. This yield produced a weighted-average discount rate for our U.K. plans of 5.50% in 2025, 5.40% in 2024 and 4.50% in 2023. The discount rate on our U.S. plans was n/a in 2025, 2024, and 2023. There are no known or anticipated changes in our discount rate assumption that will impact our pension expense in 2025.
To indicate the sensitivity of results to this assumption, a 0.1% per annum increase in the discount rate for our U.K. plans would reduce the value of the liabilities and therefore increase the pension surplus by approximately $2.7 million and result in the projected 2026 income statement credit being broadly unchanged.
Inflation rate
In September 2019, the UK Statistics Authority announced plans to reform the RPI inflation index. On November 25, 2020, the government and UK Statistics Authority confirmed these plans to reform the RPI index to bring it into line with the CPIH index from 2030, with no compensation for the holders of index-linked gilts. Inflation measured by the CPIH is consistently significantly lower than that measured by RPI, and therefore, these plans imply a significant expected reduction in RPI inflation from 2030 onwards. As a result we have taken a stepped approach and used different inflation rates pre and post 2030.
To indicate the sensitivity of results to the CPI assumption, a 0.1% per annum decrease in all CPI-linked assumptions, (including pension increases) for our U.K. plan, would reduce the value of the liabilities and therefore increase the pension surplus at December 31, 2025 by approximately $1.3 million and increase the projected 2026 income statement credit by approximately $0.1 million.
Pension increases
The pension increase assumptions have been set with reference to the corresponding CPI inflation assumption and take account of the caps and floors applicable to the various components of pension indexation.
Life expectancy
The life expectancies of male and female members aged 65 on 31 December 2025 are assumed to be 20.2 and 22.8 years, respectively, with the life expectancies of male and female members aged 65 on 31 December 2045 assumed to be 21.4 and 24.2 years, respectively.
To indicate the sensitivity of results to the life expectancy assumption, a one year increase in assumed life expectancy on the U.K. plan could increase the value of the liabilities and therefore decrease the pension surplus at December 31, 2025 by approximately $6.7 million and decrease the projected 2026 income statement credit by approximately $0.7 million.
Expected rate of return
Our expected rate of return on plan assets for our U.K. plans was 5.30% in 2025, 5.80% in 2024 and 4.80% in 2023. The expected rate of return on our U.S. plans was n/a in 2025, 2024, and 2023. The expected rate of return is designed to be a long-term assumption that may be subject to considerable year-to-year variance from actual returns. In developing the expected long-term rate of return, we considered our historical returns, with consideration given to forecast economic conditions, our asset allocations, input from external consultants and broader longer-term market indices.
See ITEM 8, Note 15 of the Notes to Consolidated Financial Statements for further information regarding pension and other post-retirement plans.
